Communication is crucial for a resilient food supply chain
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RESILIENCE METHODOLOGY
BY Hanny Roskamp
November 2018
Research on the resilience of the food chain shows how to limit the damage done by a food crisis. Spreading the news fast is crucial.
In the spring of 2002, pigs in the Netherlands started to get some strange symptoms. It soon became clear that they were infected with the banned growth hormone MPA (medroxyprogesterone acetate). The source turned out to be some feed that had been accidentally contaminated. Millions of pigs ended up having to be culled.
Contamination of animal feed may be rare but it can have dramatic consequences. Massive recalls of feed and meat can be necessary to ensure the safety of our food. How can the chain of feed supplier, livestock farmer and abattoir keep the damage to a minimum? That is senior scientist Coen van Wagenberg’s territory.
Supply chain to efficiency
“Prevention is an important part of the story. But at least as important is limiting the impact. We have geared the supply chain to efficiency. There are only a few suppliers of livestock feed, the livestock farmers have large-scale operations, and there are a small number of abattoirs, all so we can produce a lot of meat fast. But as soon as something goes wrong somewhere in the chain, it rapidly goes from bad to worse, as we have seen during crises in the past.”
PHOTO Jacob Klaver/HH
The meat production chain has used a lot of technological innovations in recent decades that have considerably reduced exposure to potential dangers. PHOTO Shutterstock
In the meat production chain you have live animals and fresh products. That makes the system more vulnerable than, say, the car industry, in which parts are not prone to going bad, Van Wagenberg explains. The meat chain has used a lot of technological innovations in recent decades that have considerably reduced exposure to potential dangers. These include hygiene measures and antibiotics. “We’ve got control over 99.9 percent of the conditions in the meat chain, but we are reaching the limits of what we can control. The system is starting to bite back.”
‘As soon as something goes wrong somewhere in the food supply chain, it rapidly goes from bad to worse, as we have seen during past crises’
Van Wagenberg thinks it is necessary to make the chain more shock-proof. “In the last swine fever crisis, it turned out that the chain as a whole can react with resilience. But for individual farmers things didn’t always work out the same way because their farms turned out not be resilient enough financially. We need new instruments to compensate for both the direct and the indirect financial consequences.”
Adaptation capacity
Within Van Wagenberg’s research, the resilience of the system is defined as the extent to which companies go bust when there is a crisis. “It’s about the adaptation capacity of the chain. How can you reduce the risk of a sudden disturbance, how can you stop the consequences from spreading, and how can you recover by reacting with effective and immediate action?”
Contamination of animal feeds may be rare but the consequences can be dramatic.
PHOTO Hollandse Hoogte
Van Wagenberg and the project team did research using a mathematical model. They simulated a hypothetical crisis in which livestock feed was infected with a dangerous toxic substance that gets into the meat, leading to a recall. The faster an abattoir knows about a possible case of contamination, the greater the resilience of the chain. A tracing system in which every cut of meat can be traced back to source could improve the resilience of the meat chain, but it would be an expensive business.
‘The better the communication within the chain, the lower the costs’
From his (as yet unpublished) research, it appeared that communication is crucial to the resilience of the system. “The point is that information about possible contamination must be passed on as quickly as possible after it is discovered. The better the communication within the chain, the lower the costs in the end. Every day you lose can cost millions because meat from pigs that have eaten contaminated feed gets mixed with meat from pigs that haven’t – in mince, for instance – so that the toxin ends up in large batches of the product that then have to be recalled from the shops.”
In the meat chain you have live animals and fresh products. PHOTOS Hollandse Hoogte
The abattoir ends up with ‘empty hooks’ too. “You can deal with that by starting to slaughter live pigs here in the Netherlands that were intended for transport to other EU countries. That makes that section of the chain reasonably resilient, but here again the same point applies: the earlier abattoirs are informed, the faster they can make changes. And effective transfer of information requires trust in the information provided.”
‘A system in which you can trace every cut of meat would improve the resilience of the food chain, but it would be an expensive business’
Van Wagenberg has proven that this is the case in the chosen simulation and his guess is that the same goes for other problems in the sector, such as swine fever. “But we’ll have to support that first with further research.”
Name
Coen van Wagenberg PhD
Position
Senior researcher at Wageningen Economic Research, Wageningen University & Research
Resilience research
Research on the costs of resilience in a production chain during a major crisis
Team
This research came about through collaboration among WUR scientists in the fields of economics, food and biobased products